Can Transportation Lead the Market Higher?

March 28, 2021

Mish's Daily

By Mish Schneider


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Written by Forrest

Mish’s Economic Modern Family is made up of 5 key sectors and 1 index.

Each member has been specifically chosen to help investors/traders navigate the market by giving an easy way to see emerging trends and important price levels.

The Family consists of:

Granddad Russell 2000 (IWM)

Granny Retail (XRT)

Transportation (IYT)

Prodigal Son Regional Banks (KRE)

Brother Biotech (IBB)

Sister Semiconductors (SMH)

Friday, IYT broke to new all-time highs.

Additionally, IYT holds an important underlying value as it represents the demand side of the market.

If goods are being moved and people are traveling, that bodes well for every other Family member.

This is where IBB, XRT, and KRE come in.

All three have pulled back to major moving averages which are often viewed as support levels.

XRT and KRE by their 50-day moving average and IBB the 200-DMA.

With Transportation’s support, come Monday, we can watch for these sectors to move higher as they spring off their moving averages.

With that said, while transportation has played its part as a leader, it will need participation from two special Family members.

The small caps (IWM) and Semiconductors (SMH).

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Friday both were able to rally over their 50-DMAs by the close, which means if both can hold over their MAs, the rest of the Family members along with the overall market will have a good reason to move upwards Monday.

This weekend we have TWO special weekly video…

  1. A rare chance to watch Mish's interview on Real Vision with Max Wiethe

The password is: 2021Schneider0325

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  1. Mish’s weekly StockCharts.com video takes a fresh Look at Emerging Markets

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This video covers: EEM EWT EWY GREK EWS EWW THD IFN INDA EWA EWU EWH EZA EWQ SPY EWJ EWP RSX EWG EWL FXI EWM EWZ AAXJ ILF VGK

ETF Summary

S&P 500 (SPY) Support 386.52 398.12 Resistance.

Russell 2000 (IWM) Needs another close over the 50-DMA 220.52

Dow (DIA) 332.86 high to clear.

Nasdaq (QQQ) Needs to stay over 309, 312 pivotal, 321 resistance and key

KRE (Regional Banks) Support 50-DMA at 63.16

SMH (Semiconductors) 238 needs to hold as new support.

IYT (Transportation) New highs.

IBB (Biotechnology) Main support the 200-DMA at 144.77

XRT (Retail) support 82.13 Needs to clear 10-DMA next.

Volatility Index (VXX) Continues to break down.

Junk Bonds (JNK) 108.61 the 50-DMA.

LQD (iShs iBoxx $Inv Gd Cor Bd ETF) 130.06 gap to fill.

IYR (Real Estate) new multi month high.

XLU (Utilities) Held over resistance. 64.19 next resistance level.

GLD (Gold Trust) Holding its range.

SLV (Silver) 22.79 support.

VBK (Small Cap Growth ETF) 259.62 support.

UGA (US Gas Fund) 30.00 support the 50-DMA. 31.79 10-DMA

TLT (iShares 20+ Year Treasuries) 135.75 200-week moving average support.

USD (Dollar) entered accumulation phase with second close over 200-DMA

EWW (Mexico) 50-DMA 42.67 support area. Needs to clear the 200-WMA at 44.38

MJ (Alternative Harvest ETF) Failed to close over the 50-DMA. Could try again Monday.

WEAT (Teucrium Wheat Fund) Watching for consolidation or to clear 6.

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One Comment

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    Thomas Leong

    Enjoyed your realvision interview, I was a little confused at around 19 minutes where you discussed having tighter stops with smaller position sizes and huge wide stops with full position size. I have seen other discussions with traders saying half the size double the stop (same risk, just less size, so I'm confused about the tighter stops with the smaller positions. Is that just to feel out the market and see where its going before committing to a full position?

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